Judge orders shutdown of DVD-streaming service Zediva

A federal judge has ordered the shutdown of Zediva, a streaming site that …

A federal judge has issued a preliminary injunction against video streaming service Zediva. The MPAA's Dan Robbins called the ruling "a great victory for the more than two million American men and women whose livelihoods depend on a thriving film and television industry."

Zediva argues that it is an ordinary DVD rental service that happens to allow customers to view their rented movies via the World Wide Web—imagine a tremendously long cord stretching from your home to the Zediva office. Like a video rental store, Zediva buys thousands of physical DVDs. Unlike a rental store, Zediva has also purchased numerous DVD players and hooked them up to the Internet. When the user wants to watch a movie, he "rents" a DVD player along with the DVD inside of it. The DVD player's output is streamed across the Internet to the user's browser.

Hollywood studios were not impressed with this perceived loophole in copyright law and sued in April, arguing that the service infringes their exclusive right to control the "public performance" of their movies. Legal experts agreed that the service was on shaky ground. "Zediva’s supposed 'loophole' in copyright law doesn’t exist,” Grimmelmann said in a March blog post.

On Monday, Judge John F. Walter reached the same conclusion. "Defendants are violating Plaintiffs’ exclusive right to publicly perform their Copyrighted Works," he wrote.

He cited a 1991 case in which courts ruled that a hotel's video-on-demand system infringed copyright. In that system, a hotel guest would choose the movie he wished to watch, then have it streamed from a bank of VCRs located in a hotel's equipment room. The courts ruled that it was irrelevant that the videos were streamed to one customer at a time in his private hotel room; the service still transmitted videos "to the public," as the statute defines that term, and thus violated copyright holders' exclusive public performance rights.

Judge Walter also seemed unimpressed by Zediva's argument against an injunction. "Defendants claim, without any evidence, that an injunction would significantly harm, if not destroy, their business," he wrote. He ruled that the harm to movie studios from lost revenues outweighed any hardship Zediva faced.

Zediva has vowed to appeal the ruling. "Today's ruling represents a setback for the hundreds of thousands of consumers looking for an alternative to Hollywood-controlled online movie services," the company wrote in a statement, pledging to stand up for "consumers' right to watch a DVD they've rented, whether that rental is at the corner store or by mail or over the Internet."

Timothy B. Lee
Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times. Emailtimothy.lee@arstechnica.com//Twitter@binarybits

This is ENTIRELY unreasonable, and the courts have screwed it up yet again. This is why, although I don't pirate content myself, it absolutely does not bother me in the least that so many people do. Hollywood has absolutely zero claim to moral high ground here.

As for the "more than two million American men and women," that's a nice sentiment until you consider how much money Big Content is raking in at the expense of starving artists, writers, and behind-the-scenes television and movie workers. This has absolutely nothing to do with their magnanimity and everything to do with shoveling even more money into their coffers.

I say, screw 'em. Let the piracy continue; it's the ONLY thing keeping them in check on prices and availability of content.

We all knew this was going to happen, Zediva was always a bad concept. But that doesn't stop it from being unfair. Rights-holders have far too much power in these situations, they're stifling innovation. Innovation that was paying them a fair amount for their work. All this is going to do is make more people pirate videos.

Nice response. You might want to read the history on this service before dismissing my comment so easily. Zediva's business model does not scale, and falls afoul of several laws. Given that, yes it is an idiotic service concept.

As to me as a user, you are welcome to your personal opinion, but I would appreciate you avoiding the personal attacks.

They were just trying to make it easy for consumers to pay for the content - idiotic indeed.

That's the whole issue --the content was purchased as a physical product, so the studios only received payment once. If you can't tell, they despise the idea that something can be "bought" and "owned" where they don't get to dictate the terms of its use. Ideally, they want payment per person per viewing.

Nice response. You might want to read the history on this service before dismissing my comment so easily. Zediva's business model does not scale, and falls afoul of several laws. Given that, yes it is an idiotic service concept.

As to me as a user, you are welcome to your personal opinion, but I would appreciate you avoiding the personal attacks.

If you wish to stop the nonsense sensationalism. Do so yourself. I'm just sick of it all. Hence my new-found reaction-ism to posts like yours. Maybe if you'd taken the time to explain yourself prior to the first remark. You wouldn't need to do this end run now!

Not suprised... if you didn't see this coming then you must not have paid any attention to the policy handed down for the last decade by courts an congress. The sad thing is its hard to see what is really infringing about either this model or the VCR model that the judge used as precedent.

Here's a question: if there had been a $30 sign-up fee to "buy" a DVD player for your own usage, would we be having a different discussion? Then would this be a "length of cord" case instead of issue of renting a dvd player? I remember in my younger years going to blockbuster and renting a Sega Genesis. Does anyone else remember that? Should they have gotten sued as well for allowing me to rent a system instead of only allowing me to rent a game?

Doesn't the MPAA have bigger fish to fry? Like making movies people actually want to see instead of the sludge and drivel that drips out of Hollywood these days? And maybe not flogging successful movie franchises into oblivion? Then people might actually want to buy a DVD or go to the theatres. Still not sure even a great movie is worth $30 on "blu-ray."

Wait. In what way is an injunction preventing them from doing business NOT significantly harming their business?

I thought the same thing. I'm also wondering how the public-performance statute defines "public", as referenced in that 1991 case, which itself seems stupid. It seems like the onus of proof should be on the studios to prove that this method is significantly different and more harmful than the legal practice of distributing a physical DVD, and I really don't see how it is.

Part of me says the right logical ending was reached given the facts but the other part says that this is as much about copyright infringement as it is about the MPAA strong arming their way into the position of controlling the ENTIRE chain all the way from content concept through to end users watching it. Any public performance mechanism that is not dominated and controlled by MPAA and the industry is seen as a threat. MPAA see what RIAA did wrong (or at least what MPAA considers wrong) in allowing a delivery mechanisms to exist and develop that they don't control: (Apple iTunes and Amazon) and they saw how it weakened their position and revenue generation and have said "it ain't happenin' here". They will do whatever it takes, legal or otherwise, to ensure they completely and utterly 1000.00% control the entire process down to the finest detail and none of that involve people with innovative, bright ideas that skirt around one-sided, monopolistic and egregious licensing deals that do nothing but extract ridiculous amounts of money for very little for the crap they turn out...

I am sad about this ruling and about its precedent. That video tape streaming to a single room is not legal but a customer can borrow a tape from the front desk? Crazy. Zediva seemed like a decent, if awkward, library approach to video rights.

Nice response. You might want to read the history on this service before dismissing my comment so easily. Zediva's business model does not scale, and falls afoul of several laws. Given that, yes it is an idiotic service concept.

As to me as a user, you are welcome to your personal opinion, but I would appreciate you avoiding the personal attacks.

If you wish to stop the nonsense sensationalism. Do so yourself. I'm just sick of it all. Hence my new-found reaction-ism to posts like yours. Maybe if you'd taken the time to explain yourself prior to the first remark. You wouldn't need to do this end run now!

Or, alternatly, you could avoid comment threads that are likely to piss you off. I'm not responsible for your feelings or reactions.

Sigh. I'm not surprised at this, but I still have largely the same reaction I had when we first heard about Zediva. Clearly, people want to stream movies over the Internet. Why is it so difficult to meet market demand? Its not like its a finite resource. Why is the industry trying to keep people from getting the content they want? For that matter, why are our laws written such that admittedly ridiculous methods like Zediva's are even necessary?

I am sad about this ruling and about its precedent. That video tape streaming to a single room is not legal but a customer can borrow a tape from the front desk? Crazy. Zediva seemed like a decent, if awkward, library approach to video rights.

It could be argued that the streaming nature disconnected the private performance aspect from the media.

In other words, the hotel, and Zediva, are broadcasting, which is not a right the copyright owners have granted them. That's really a license issue, just like Apple doesn't license you the right to use OS X on a ThinkPad and Microsoft doesn't license you the right to use the OEM Dell Windows image on an HP system.

It's not public broadcasting if it's only being viewed in the privacy of one's home. The judgement is wrong.

it is if the player is not in their home.

That seems pretty arbitrary. Does the process of mastering a DVD from an original film source, selling it in retail stores, and mailing it to renters also a public performance because the original film isn't in the renter's home?

In other words, why is it that the process of delivering the media to a given consumer is what defines it being public, and not the number and setting of the consumers themselves?

This is all about control, the middle man is going to do everything it can to retain its business model of "do nothing, collect payment". Our govenrment is pathetic, but then again, its the best government money can buy.

I hope the appeal succeeds, because this is no more a 'public performance' than Netflix's service is. As for this blatant piece of lying-ass propaganda:

"a great victory for the more than two million American men and women whose livelihoods depend on a thriving film and television industry."

That's a complete crock. Zediva is buying the physical media and (presumably) paying a rental license fee just like any other rental store, so in fact they are *making money for Hollywood*. Also: google "hollywood accounting". Come back and complain when the writer of Forrest Gump finally sees a dime for his movie...

I do wish the Ars staff would be a bit quicker to call out the utter BS put out by the industry.

So if I own a dvd player and some movie, and I play it from my home and stream it to where I am, is that a "public performance"?

It seems the suggestion of "buying a dvd player" at Zediva's office might get around the issue. But I suppose that might create a lot of headache at their end where a player probably holds a single disc and the stream just gets re-routed to whoever may request that movie

There is no fair copyright system that results in Big Media making as much money as they did before and they are only interested in digital distribution to the extent it allows them more control over their intellectual property. There is money to be made by increasing restrictions on content, while economic freedom comes at a cost to incumbent business.

We will not see a proliferation of digital distribution until Big Media feels safe distributing their content online. The 'six strikes' law for them is a step in the right direction and they need to see more ISP control of the internet (abolition of net neutrality) before they feel really comfortable bringing their media collections online.

It's not public broadcasting if it's only being viewed in the privacy of one's home. The judgement is wrong.

it is if the player is not in their home.

How so? Surely "public" refers to the number of people watching rather than the location in which it's viewed. Either way the same thing applies to video rental stores - who knows where the DVDs are being watched once they leave the store?

Zediva is buying the physical media and (presumably) paying a rental license fee just like any other rental store

Actually, they don't even need any special license to rent a purchased movie to a third party, under the first-sale doctrine. If they did have a license agreement with the studios, it seems unlikely that the studios would sue them.

This was always a Rube Goldberg system, and I don't see how they could ever make a profit in the age of Redbox and Netflix. OTOH, declaring this copyright infringement is a clear act of ignorance. Judges with insufficient technical understanding have no business making rulings on cases like this.

Two million people in the film and television industry? Isn't that about the same size as the number of civilian employees in the US Federal Government (sans post office)? Scary, and about as efficient/useful/sensible.